The USD/CAD pair broke higher during the course of the day on Tuesday, clearing the top of the hammer that had been formed during the Monday session. By doing so, looks as if the market is trying to break out to the upside and I think if we can get above the 1.3250 level, we are free to go to the 1.35 handle over the longer term. Of particular interest will be the Crude Oil Inventories number coming out of the United States today as oil has such a massive effect on what happens with the Canadian dollar. It is the inventory numbers start to climb yet again, that could be reason enough to push down the oil markets, and by extension we could see a move higher in this pair.
I think that there is quite a bit of support all the way down to the 1.31 handle, so therefore think pullbacks will be buying opportunities and I believe that we will eventually grind higher but we could get quite a bit of choppiness between here and the higher levels. With this being the case, I think you will have to be of the deal with quite a bit of volatility but ultimately I believe that the buyers will continue to take control this market as we have seen a very impulsive move higher of the last couple of weeks, and have simply sat here which of core show signs of strength anyways. Because of this, I believe that the buyers will continue to get involved as we believe that the Canadian dollar is on its back foot recently, as the Canadian economy has been slowing down. With this being the case, I think that a bit of a “safety trade” is an effect when it comes to the United States dollar, so that of course leads over into this market as well. With this, I don’t have any real interest in selling, because I believe that there is a massive amount of support to be found at several areas below.
